A bipartisan bill to allow plan sponsors to use lifetime income solutions as qualified default investment alternatives was reintroduced in the House Tuesday.
Reps. Donald Norcross, D-N.J., and Tim Walberg, R-Mich., reintroduced the Lifetime Income For Employees Act of 2022, or LIFE Act. The two congressmen, who serve together on the House Committee on Education and Labor's Health, Employment, Labor, and Pensions Subcommittee, previously introduced the bill in December 2020 during the previous congressional session.
"As a retired electrician, I know first-hand how important pensions are to workers who rely on them for their retirement," Mr. Norcross said in a news release. "By creating 'individual pensions,' this legislation will provide hard-working Americans with a guaranteed income so they can retire with dignity."
Added Mr. Walberg in the same news release: "Encouraging and increasing access to savings options will help provide workers with greater peace of mind that their income will last throughout retirement."
The LIFE Act, text for which was not immediately available, would allow lifetime income options as QDIAs for a portion of contributions made by participants who have not made investment selections. Under the bill, a QDIA could include a limited investment in a non-liquid annuity component, the Insured Retirement Institute noted in a statement of support.
"Current Department of Labor regulations governing QDIAs have created a barrier to using certain investments — including protected lifetime income solutions like annuities — that do not meet specific liquidity requirements," said Paul Richman, IRI chief government and political affairs officer, in the statement. "The regulations have created an environment where savers who utilize their plan's QDIA only invest in vehicles that build assets and contain no mechanism to convert those assets into guaranteed income during their retirement years."
Thasunda Brown Duckett, CEO of TIAA-CREF, welcomed the bill's reintroduction in a separate statement. "This legislation will encourage employers to adopt annuities as part of their default offering so more Americans can seamlessly transition from saving for retirement to realizing guaranteed income when they retire."
